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By:

Kaustubh Kale

10 September 2024 at 11:37:15 pm

Nine Financial Tips for a Prosperous Navratri

As Navratri draws to a close, I wish you and your family happiness, prosperity, and continued success. Festivals are a time of celebration, but they also serve as a valuable reminder to reflect on our financial habits and strengthen our financial discipline. In the spirit of the nine days of Navratri, here are nine essential financial tips to help you stay on track with your financial goals and make your journey towards financial freedom smoother and more secure. Build an Emergency Fund Make...

Nine Financial Tips for a Prosperous Navratri

As Navratri draws to a close, I wish you and your family happiness, prosperity, and continued success. Festivals are a time of celebration, but they also serve as a valuable reminder to reflect on our financial habits and strengthen our financial discipline. In the spirit of the nine days of Navratri, here are nine essential financial tips to help you stay on track with your financial goals and make your journey towards financial freedom smoother and more secure. Build an Emergency Fund Make sure you have at least six months of living expenses saved in a bank fixed deposit or a debt mutual fund. This reserve will serve as your emergency fund for unforeseen situations and ensures you are prepared for any rainy days. Review Your Asset Allocation Revisit your investments to ensure they align with your goals. For short-term goals within three years, bank fixed deposits, recurring deposits, or debt mutual funds are appropriate. For long-term goals beyond three years, a diversified combination of hybrid/equity mutual funds, direct equities, and gold should be preferred. Do Sufficient SIPs Systematic Investment Plans (SIPs) are the backbone of disciplined investing. At least 25-30 percent of your in-hand monthly income should ideally be invested through SIPs in mutual funds, equities, and gold. This consistent approach will steadily build wealth over time. Make Lumpsum Investments Along with SIPs, voluntary lumpsum contributions into long-term assets whenever you have surplus funds can accelerate wealth creation. Even occasional lumpsum additions make a significant difference to the overall corpus. Increase Your SIPs Annually As your income increases, make sure your investments grow as well. Increasing your SIP amounts every year helps your wealth stay in line with inflation and your rising lifestyle needs. Increase your SIPs yearly and anchor them to at least 30 percent of your monthly income. Stay Invested Remain invested until your financial goals are achieved. Avoid redeeming investments unnecessarily. Frequent withdrawals disrupt compounding. If liquidity is required, consider taking an overdraft loan against your investments rather than breaking them prematurely. Health Insurance Safeguard your family with adequate health insurance. Opt for a minimum cover of 25 lakhs per family member with comprehensive features. Remember that relying only on employer-provided insurance is risky. Independent health insurance is essential. Term Life Insurance Protect your loved ones with a pure term life insurance policy. Ensure a cover of at least ten times your annual income, along with provisions for any outstanding loans. Stay away from mixing insurance with investments. A simple term plan is the most effective solution. Consult a Financial Advisor A full-time, well-qualified financial advisor can simplify your financial journey. Professional guidance ensures disciplined planning, correct product selection, and proper execution of your financial strategy. May this festive season bring abundance and lasting financial peace. (The author is a Chartered Accountant and CFA (USA). Financial Advisor. Views personal. He could be reached on 9833133605.)

Free to Trade: What the India-UK FTA Really Means

May 21, 2025
3 min read

The sweeping Indo-UK deal promises tariff cuts, tech collaboration and a shot at global trade leadership.

The past month has presented India with numerous challenges, from the turmoil surrounding Trump’s tariffs to escalating tensions with Pakistan. Yet, despite these adversities, India remains steadfast, demonstrating resilience in the face of uncertainty. In the first week of May, as the government strategized its response to the recent terrorist attack, a significant milestone in global trade was reached wherein India and the UK successfully finalized their Free Trade Agreement after three years of intense negotiations. The treaty now awaits approval by India’s Union Cabinet and ratification by the UK Parliament, with full implementation expected in about 15 months. In FY 24–25, bilateral merchandise trade between the two nations reached $21.3 billion. Indian exports today stand at $12.92 billion against $8.41 billion in imports. The agreement seeks to boost bilateral trade to $120 billion by 2030.


The FTA prioritizes phased tariff reductions, protection for sensitive sectors, improved mobility, social security exemptions for professionals, and limited government procurement liberalization. This gradual approach balances trade openness while minimizing disruptions for domestic industries.


India will gradually reduce tariffs on 90 percent of British goods, with 85 percent becoming duty-free over the next ten years. In return, the UK will eliminate tariffs on multiple Indian products, granting 99 percent of Indian exports tariff-free access. This enhances market opportunities, supply chain stability, and competitiveness for Indian exporters. The agreement also includes rules of origin to ensure benefits remain exclusive to businesses in both countries.


The removal of the 12 percent tariff on pharmaceutical formulations could significantly boost India's $50 billion pharma exports, especially generics, to the UK’s National Health Service. However, stricter UK regulations may raise compliance costs for smaller Indian manufacturers. Additionally, the phased elimination of the 10 percent tariff on garments over five years could help revive India’s global textile trade share, which has declined from 25 percent in 1947 to 5 percent in 2021.


India and the UK have safeguarded sensitive sectors from tariff reductions to protect vulnerable industries while advancing broader trade liberalization. Excluded items include agricultural products such as dairy, apples, cheese, eggs, and oils, alongside industrial goods like plastics, diamonds, silver, smartphones, and optical fibers.


The agreement benefits Indian professionals in the UK by extending the social security exemption period from one to three years, preventing dual contributions. It also streamlines visa procedures, easing mobility for engineers, architects, accountants, and consultants, while reducing barriers for conferences, intra-company transfers, and contracted services. Mutual recognition of professional qualifications has the potential to increase India’s IT services exports by $5 billion annually, which can crucially cater to the UK’s demand for AI and cybersecurity solutions.


While the FTA enhances exports, it also intensifies competition for Indian industries. Tariffs on UK Scotch whisky and gin will gradually drop from 150 percent to 40 percent over a span of ten years, potentially impacting domestic producers. UK automobile imports will see phased tariff reductions from over 100 percent to 10 percent, thereby lowering prices for premium brands like Jaguar Land Rover and Rolls-Royce, increasing pressure on Indian luxury carmakers. The treaty introduces a limited EV quota system, allowing the UK to sell 22,000 high-value EVs in India at a 10 percent duty, while India secures a quota for low- and mid-range EV exports to Britain, balancing trade and domestic industry protection.


The treaty allows UK firms to bid for central government procurement, excluding state and local contracts. Those with 20–50 percent local value qualify as ‘Class II’ suppliers, receiving limited preference compared to ‘Class I’ suppliers with over 50 percent domestic content—ensuring continued support for MSMEs and the “Make in India” drive. Amid global trade disruptions, this treaty offers Indian traders a chance to diversify their markets and lessen dependence on China and the USA.


As Western economies seek alternatives to China, the agreement could set a precedent for others, prompting a shift toward Indian manufacturing through bilateral pacts. Furthermore, the UK’s ageing population and tech talent gap open lucrative opportunities for Indian professionals in healthcare, education, and fintech, with the potential to create two million jobs by 2030.


However, tariff cuts could narrow India’s trade and services surplus with the UK if imports outpace exports.


India must reform its manufacturing sector, especially easing rules for SMEs and strengthening IP enforcement to stay globally competitive. The Indo-UK FTA serves as a catalyst for growth under the Viksit Bharat 2047 vision, promoting exports, tech collaboration, and resilience. But to solidify its global standing, India must fast-track FTAs with the US, EU, and ASEAN, ensuring a competitive edge in the international market.


(The author is a Chartered Accountant with a leading company in Mumbai. Views personal.)

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